Technology spillovers and sustainable environment: Evidence from time-series analyses with Fourier extension

Globalization and human capital accumulation are the main drivers of technology spillovers and essential for economic growth. At the same time, globalization and human capital are drivers to construct a green growth path that prevents pollution and the overuse of resources, and thus mitigates environmental degradation and achieves sustainable development. This mechanism, known as the 'technique/technology effect', may occur by stimulating technological development and creating environmental awareness and is of utmost importance in developed and developing countries to protect the environment. The aim of this study is to evaluate these outcomes, investigating how the environment reacts to developments in globalization and human capital accumulation by performing time-series analyses augmented with Fourier extensions, for countries in the BRICS group (Brazil, Russia, India, China and South Africa). The study first checks unit root and cointegration relationship by using Fourier unit root and Fourier cointegration approaches. Having confirmed a cointegration relationship, the FMOLS estimator extended with Fourier terms is applied to estimate cointegration parameters. Empirical results show that globalization and human capital are beneficial to protect the environment and to build a sustainable blueprint for the future, which specifically refer to more investment in the educational system and more efforts promoting social and cultural interaction across the globe.